Non-Domestic Rating (Lists) (No. 2) Bill

Lord Thurlow Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Monday 18th January 2021 Lords Chamber

[Lord Thurlow (CB) [V]]

I wish to address the Bill concerning non-domestic rates on commercial premises. The other Bill has been well discussed; I certainly support it. I declare my interests as in the register.

I cannot make these comments without some focus on reform of the system. By way of background, I spent some 40 years working in non-domestic property. I also spent a limited time—but some time, nevertheless—in the rates department of my firm, where I learned that this is a highly specialised sector lying within a specialist division of the RICS. It is a complex business.

This Bill is about moving the revaluation date forward, thus adopting values from March this year. I believe that it is flawed. In the retail sector, it will be very difficult, if not impossible, to establish estimated rental value—ERV—based on supply and demand and comparable evidence. There are probably thousands of empty shop units across England and Wales. Some will have had no offers for many months, let alone competition—an unheard-of blight in my 40 years of market practice. Many landlords have given up the premises for temporary charity use precisely to avoid the NDR obligation. There is virtually no retail letting activity from which the ERV must be assessed in only a couple of months’ time.

This blight was predicted. For 10 years at least, the industry has been debating the implications of internet shopping for the traditional retail format of high streets, out-of-town shopping and shopping centres. The threat was clear, and it has arrived. Traditional retail must change dramatically if it is to survive the low-rent, low-rates model of internet shopping.

Of course, the body blow to traditional retail is Covid. For many retailers, it is the death knell of their businesses. Every day, the newspapers remind us of high street retailers folding. A few will be bought out of administration but many will disappear, with jobs lost, debts, personal guarantees and tragedy. However, if you are Amazon or any internet retailer, Covid has played into your hands, with low rent, low rates and collapsing competition.

With the Government turning something of a blind eye to the soft rates regime for these internet businesses, the high street carnage comes as no surprise. Yet this could swiftly be corrected if the rating value rules recognised internet warehouses as the engine room of internet shopping. The burden of rates should follow the money and the profits. We should treat these warehouses as the retail properties they have become. The Government have provided Covid rates relief—huge relief—but to the high street, this is a stay of execution, not a cure. Retail patterns are not changing; they have changed.

Moving the valuation date will require valuers to assess ERV at the trough of a dead market. There will be little evidence. The problem will arrive with an appeals process of huge proportions. There will be a tsunami of claims. Without internet shopping, this would not be a problem.

The fundamental review that we expect in the spring, as mentioned by the Minister, is welcome but I fear that these events are occurring in the wrong order. The definitions of “internet shopping” and “distribution centres” must be rewritten to acknowledge their role. Following that event, the valuation process could unfold. High street retail could settle down. Rates would be at an economically justified level. Post-Covid markets would be able to return to a balance between supply and demand.

I fear for those in the VOA who, I believe, will be overwhelmed by the appeals process. I am afraid that the NDR, as applied to retail, is a broken system. There has been a simple transfer of retail trade away from shops to the internet without the corresponding and necessary transfer of rateable obligation. Can the Minister tell the House how long we must wait, following the review, for legislation to reform fundamentally the non-domestic rating system?

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Thurlow Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

The number of NDR appeals will rise dramatically. Can the Minister say whether sufficient trained personnel are ready to hear these appeals, or will there be a return to the scenario I started my speech with, where appeals wait years to be heard? It is vital that businesses and local authorities are able to see just what the likely wait for an appeal will be. The regular publication of the numbers waiting for an appeal is vital. Local authorities and businesses could be waiting for huge appeals to be heard with millions at risk, as noble Lords have indicated. This is not good for the recovery of the economy. A rapid system of hearing business appeals is essential and publication of the waiting list within six months of the passing of this Act would be a reasonable timeframe to assist local authorities to assess the seriousness or otherwise of the situation. I fully support this amendment and look forward to the Minister’s response.

[Lord Thurlow (CB) [V]]

My Lords, I thank the noble Lord, Lord Kennedy of Southwark, and the noble Baroness, Lady Bakewell of Hardington Mandeville, for tabling this amendment. I declare my interest as set out in the register. I also take the opportunity to thank the surveyors Gerald Eve for their time and assistance in preparing for this debate.

My concern is the rapid rate of the collapse of high-street businesses—not just the well-known brands that have been referred to but small family businesses, private enterprises and start-ups serving local markets while hoping to succeed, expand and grow. As the noble Lord, Lord Kennedy, commented, the system needs root and branch reform. These retailers’ rating assessments are currently based on pre-crisis levels of rental value, but those values have really collapsed. They were set at a time when there was a healthy economy, with low interest rates and constructive market tension in the leasing marketplace, arriving at competitive rents that were exactly what supply and demand required. That has been lost—which is to say, the values have collapsed as turnover has collapsed—and the rates applied and being paid today are much too high.

We have seen this collapse in values for several reasons; the rates payable by these businesses are the final straw. They can appeal, but there will be long waiting lists. We heard the noble Lord, Lord Kennedy, say that there were 40,000 still hanging over, some from 10 years ago. I am afraid, too, that hundreds, if not thousands, of small businesses will be forced to pay the published rates until appeals are heard, whenever that may be. They will of course have long gone and disappeared as businesses by then.

This is why I am absolutely certain that an impact assessment on appeal waiting lists arising from this Act is so important. I consider six months the absolute minimum period to attempt the impact assessment. It is unfortunate—the sooner the better—but I do not see how they can do it in less. The surveyors may be stretched to their limits to process the appeals.

The process involves a check, challenge, appeal programme, which puts the onus of setting rental value for rateable value purposes on the appellant. The only way to arrive at rental venue is to look at comparable properties and find the latest rental evidence from the marketplace, which is then applied. But there is virtually no evidence. The markets have been sliding, both for offices and retail, and we know that the rating assessments are now significantly in excess of what they should be.

I mentioned retail, but imagine the difficulty of estimating rental value for offices in two months’ time, when the date occurs. Many office buildings are empty or on a skeleton staff rotation. If they are more than a couple of floors tall, social distancing means that you cannot get into a lift. Businesses are, as we speak, considering their future office needs. Working from home, like so many of us are in this debate, means that less square footage is likely to be required. As I said, in the bottom of the trough of this rental crisis, experts will have great difficulty estimating rental values.

Will the Minister please impress on the Government the importance of urgency in addressing this rateable imbalance? Businesses are collapsing in all communities. I support the impact assessment on appeal waiting lists, but it is difficult not to imagine that the appeal process will struggle under the weight of appeals, and I urge the Government to prepare for that probability.

[Lord Stunell (LD) [V]]

My Lords, it is a privilege to speak after the noble Lord, Lord Thurlow, because he has more or less stolen my thunder, which means I can be really quite brief. He outlined very clearly a common thread in all the debates so far today: the absolute urgency of getting this problem fixed. We all know that it needs a longer-term fix, with a complete overhaul of the system, but, if we are to stay where we are with the current system unamended while we wait for that golden day of amazing reform, I fear that many businesses in the country will collapse and fail, not just in the high streets, but, as the noble Lord, Lord Thurlow, so elegantly and persuasively said, in the office sector and elsewhere. Something has to be done in the meantime—which, of course, was the burden of some of the earlier debates.

The point of the amendment and the impact review is to challenge the Government by saying that what they propose to do—or, perhaps more accurately, what they propose not to do—will leave many businesses in profound despair about how they will manage in the next 18 months or two years. It is obvious that many people will appeal. The number of appeals will be large, not small, and if we start with a backlog from the previous system, that will get worse still.

My noble friend Lady Bakewell asked the Minister some piercing questions that I hope he will respond to about the efforts being made to train panels and find the expert support needed to get the appeals in the system moving through at a proper level. What about the waiting times? Is the Minister, or indeed the VOA, setting a target to deal with this backlog to make sure that it does not pile up behind the new unfolding situation? The noble Lord, Lord Kennedy, has already pointed out the 40,000 appeals. I know that some of those are very specific to one or two topics, but that is not quite the point: one or two specific topics might crop up in this round of appeals and this revaluation that will cause similar problems.

So I strongly support the thrust of the amendment and I believe that we do need an impact assessment. We need some positive action from the Government and I look forward to hearing how the Minister proposes that that should happen.

--- Later in debate ---

[Baroness Pinnock (LD) [V]]

My Lords, the purpose of Amendment 4, which stands in my name and that of my noble friend Lord Shipley, is to open up a debate about the revolution taking place in the retail sector. It is a revolution that is being accelerated as a consequence of the pandemic, which has resulted in the non-food retail sector being in shutdown for many months, with a very large transfer of shopping to online retailers. Retail analysts suggest that this significant change in shopping habits is here to stay.

Recent reports on the retail sector make the same points. Bill Grimsey, in his report in 2018, described the effect of business rates on the retail sector as “malevolent” and one that hinders growth. Business rates are, of course, just one inhibiting factor that affects the vibrancy of the physical high street. However, it is like a weather vane, indicating that all is not well with the retail elements of our town centres.

The array of shopping giants that have closed in recent years is a health warning that the Government do not appear to be heeding. Toys “R” Us, Maplin, Poundworld and others closed their doors in 2018. This year, a staple of the high street, Debenhams, is finally closing its physical presence on the high street. The Arcadia Group, which includes a string of well-known brands in many towns, is in administration. There seems little prospect of any of them reopening their shop doors; the businesses will simply go online.

The combination of closures is a large hit on many towns, as those businesses provided both an attractive shopping experience and business rates income for local authorities. The Government really do have to address this with some urgency. The problem is well known: physical retailers have financial overheads that their online equivalents do not.

The comparison of overheads in terms of business rates is stark. In my own town of Cleckheaton in West Yorkshire, an average-sized shop on the main street with 30 square metres of floor space is paying at the rate of £250 per square metre, resulting in a rates bill of around £3,750 per annum. A large Amazon warehouse adjacent to a nearby town in Yorkshire has 40,000 square metres of floor space. The rate per square metre for this giant in the retail sector is £45 per square metre. This results in a business rates bill of £900,000 per annum. If Amazon, as an example—there are others—were required to pay at the same rate as this smallish shop in a small town centre in West Yorkshire, its rates bill on this warehouse alone would be £5 million per annum. That is why attempts to save our high street will fail unless this hugely unfair advantage enjoyed by online retailers is addressed—hence the amendment from the Liberal Democrats.

The very least that the Government should do is to review the impact on local high streets and assess whether the new revaluations harm even further the ability of the retail sector to compete successfully with online businesses. We cannot, like the myth of Canute, hold back the tide of change in shopping habits. However, what the Government can and should do is provide a level playing field for retailers. This is not a problem that can be kicked down the high street in the hope that the sticking plasters of high-street and town funds from the Government will stem the demise of town centres; nor is there an easy solution, but then Governments are elected to deal with difficult problems.

There is an urgency in finding a solution, as I have indicated. Will the Minister provide any certainty for high-street retailers that the Government accept that a revolution in retail habits has to be accompanied by a revolution in business rates? I look forward very much to the Minister’s response.

[Lord Thurlow (CB) [V]]

My Lords, I thank the noble Baroness, Lady Pinnock, for tabling this amendment, together with the noble Lord, Lord Shipley.

There is no doubt that an impact assessment of the new valuations on the high street is worthwhile and important. It is actually vital. We have already seen the change in the high street referred to by the noble Baroness, Lady Pinnock. The former retail parades that once flourished now see nail bars, estate agents, coffee shops and charity shops proliferate. I am delighted, of course, for the charity shops and their sector, but please understand that many of these shops are paying a 20% rates bill and are there because their landlords heave a sigh of relief that they have found someone to relieve them of the burden of the empty premises rates that would be applied after they have lost their traditional tenant.

Our high streets and shopping centres are the focus of local communities. Social health and welfare to some extent depend on them. We cannot afford to lose them because of unrealistic operating costs. I was very pleased when the noble Lord, Lord Greenhalgh, referred just now to the Government’s recognition of the importance of vibrant town centres. The health of those centres lies in the gift of the Government, right now, and in their ability to construct fairness in the apportionment of the NDR burden.

This amendment includes reference to the ability of high streets to compete with online. It is an often-discussed subject, and the urgency of rebalancing the rates burden could not be more pressing. The noble Baroness, Lady Pinnock, mentioned Amazon. I saw in today’s Times an appalling reference—appalling to me, anyway— that £1 in every £20 spent on retail is spent through Amazon. I assume this was a reference to last year, or to the last accounting year.

Amazon, of course, is a giant, but there are hundreds of online retail businesses and we are right in the midst of a massive societal transfer of shopping habits from the traditional shop or store in or out of town, in or out of a covered shopping centre, to online. Covid, of course, has forced that rate of change to accelerate faster than it otherwise would—but it was a concern many years ago.

There are numerous constructive proposals to recoup a fairer contribution from the online sector to the tax base. To equitably rebalance the transfer of sales between online and the high street may require a 40% reduction in the high street burden. That is a huge reduction. I am afraid that the Treasury cannot expect revenue neutrality by simply transferring this across to other commercial sectors. The slack is just not there, particularly if we have to take a reduction from the office sector as well. Logistics, industrial and warehousing will not fill the gap. That is a real worry and a concern. Local authority funding has been referred to already, but I am afraid that it is something that needs addressing.

I support the amendment. The health of the high street cannot wait for the results of the fundamental review that was discussed at Second Reading and has been mentioned by the noble Lord, Lord Greenhalgh. I was very grateful for that, but the issue is too pressing.

My principal concern remains the difficulty of assessing rental value in these most uncertain times. I do not think that it will be possible. Appeals may descend into chaos. Certainly, I predict long delays. Rental values will have to be assessed post Covid, not in eight weeks’ time. A short-term arrangement will be necessary for the non-domestic ratepayers on the high street and in the retail sector to cope with the transfer to online, and I hope that the Minister will be able to make some constructive comments to help give comfort to all of us who are concerned.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Thurlow Excerpts

Report stage & Lords Hansard
Monday 1st March 2021 Lords Chamber

[Lord Stunell (LD) [V]]

My Lords, I speak in support of Amendment 1, just moved by the noble Lord, Lord Kennedy. It is a real pleasure to follow him and his very measured and careful support for the need to tackle the issues on which I too will comment.

I am disappointed that the Government and the Minister have not thought fit to take on board the range of sensible improvements put to your Lordships’ House in Committee. A wide range of noble Lords spelled out the difficulties that an unamended Bill will impose, particularly on the hard-hit retail sector, where the devastation of Covid-19 lockdowns on top of a decade-long decline in high street sales has wiped out a long string of household names, as the noble Lord, Lord Kennedy, rightly rehearsed

The Chancellor’s emergency business rates relief has certainly been a life saver. The Association of Convenience Stores says that four out of 10 of its members would have gone out of business without that support in the past year. It is no wonder that many Conservative MPs are calling on the Chancellor to extend that scheme, and to provide some continuing support to the high street, at least until Covid restrictions are fully lifted. I hope he will do that but, as we discussed in Committee, that could all be in vain if those retailers are then left waiting for years for the revaluation, which this Bill will trigger, to come into effect. The big risk is that the cavalry will arrive too late—in time to count the dead, but too late to bring success to the high street.

Today’s amendment is in default of any response so far by the Government to these issues. It requires an annual audit of the heavy burdens borne by some, especially high street retailers, alongside the unearned tax holidays given to others, particularly distribution centres and the gigantic out-of-town warehouses of the online retailers. Those businesses are booming and occupy property that is virtually untaxed under the present regime, compared to the high street trader.

The amendment refers to the impact of the timing of rates revaluation, and that is what I want to focus on. I want the Minister to respond to this specific point when he winds up: does he acknowledge that unless the Chancellor’s rate relief scheme is extended, or the effective date of implementation of the revaluation in this Bill is brought forward, there will be a hiatus, when many small shops will face ruin? They will be forced to pay wholly disproportionate property taxes, which are now completely out of kilter with current rental and property values. If he does acknowledge the reality of the hiatus, will he undertake to work with the Treasury to bridge it? That could be by extending the existing scheme set out by the Chancellor, or by bringing forward the effective implementation date of this Bill, or both.

Further to that, it is noteworthy that the Non-Domestic Rating (Public Lavatories) Bill has a retrospective implementation date of 2020. I presume that that means that the Government accept the principle that the benefit of a reduction in rateable value can be backdated. If it can be done for public lavatories, surely it should be done for high street shops as well. If the antecedent valuation date is taken as 1 April this year, as set out in this Bill, surely it makes sense in the current circumstances to make that the date from which the payment amount is calculated. That would not be immediate cash in hand, of course, but it could be a vital, bankable credit for a struggling business and give retailers the incentive and the means to keep going through this crisis until the valuation is actually published. Will the Minister undertake to explore this with the Chancellor as one of the ways of closing the chasm between the end of the Treasury scheme and the coming into force of this Bill?

If the Government are serious in saying that we have to build back better, surely this is exactly the time for some joined-up thinking across government departments. Is this not exactly the simple bridging measure that would help stop the disruption of our high streets? We all know that thriving local communities everywhere need ready access to diverse public and commercial services that serve everyone, and that a healthy and diverse local retail sector is an essential part of that. This is not at all about keeping alive an outdated business model that is able to limp along only with tax cuts and subsidies; it is about putting right a taxation injustice that is now beyond dispute, so that high streets can do what they do best: provide local communities with a focal point for the things they need. I support Amendment 1 and I look forward very much to hearing that the Minister does too.

[Lord Thurlow (CB) [V]]

I thank the noble Lord, Lord Kennedy, for tabling Amendment 1, which I wish to speak to, and it is a pleasure to follow the noble Lord, Lord Stunell. I declare my interests as set out in the register. I am a non-domestic ratepayer in Scotland, although I know this Bill does not include affairs in Scotland.

The Bill is all about timing; it is not about fairness, fitness for purpose, the impact on business, sorting out the appeals system or any other aspect of what has become, I fear, a broken system. The Bill ignores the most critical timing issue, which is simply that of dealing with the appeals backlog—ratepayers paying the requested sum until an appeal is settled. In the current circumstances, that is critical. We cannot expect the Covid-related rates holiday to last for ever. We have seen a collapse in retail rental values over the past 12 months, and as both the noble Lords, Lord Kennedy and Lord Stunell, have pointed out, it was a crisis long before this. Some tenants are to pay double the appropriate rates bills. This amendment brings the plight of the high street retailer into high relief. The annual report it proposes would focus specifically on small businesses, as set out in subsection (2)(b). I am pleased that it also addresses the elephant on the table of all non-domestic rates discussions in the retail sector: the killer impact of the online assault on the high street, as we have heard from both the previous speakers.

Online retail is not a bad thing and it is clearly the future for a huge percentage of domestic spending. The bad thing is the Government’s inability—after years of notice, for online is not a new phenomenon—to recognise the twin neglects of taxing the profits of online and of fairness in the spread of rates between the high street and that sector. Subsection (2)(d) of the amendment requires that the report address the impact of the revaluation timing on local authority finances. Rates are a critical ingredient in local authority finance, but unfortunately the funding gap that the next revaluation will create will lead to a difficult political challenge: how to replace the fall in rates funding—another reason to delay the reform so desperately needed.

Subsection (2)(e) addresses the subject of waiting lists for appeals, which I mentioned earlier. This has become critical. Waiting list delays are themselves enough to put many out of business—a good example of shooting ourselves in the foot of local authority funding. The end result will be worse.

I must refer also to the fundamental review—a story of delay. It is most disappointing, in that the most vulnerable ratepayers can hardly speak for themselves. This delay will be the death of many small, innovative and hardworking businesses, the very ones the Government claim to champion. Should the noble Lord, Lord Kennedy of Southwark, press for a Division on this amendment, I will certainly support it. But my greatest concern is that the valuation date for the revised NDR lists has been chosen at a point in the market cycle that provides no evidence. In my 40-odd years in this profession, I have seen highs and lows in the rental value market cycle, but I have never seen paralysis. Paralysis is what we now have in the rental market from which the rate levels are derived. It will probably lead, as I explained in Committee, to a huge mass of rating appeals. I ask the Minister to take these comments back to the Government, but I fear that it is too late.

[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Thurlow, and I declare my interest as a vice-president of the LGA. I congratulate the noble Lord, Lord Kennedy of Southwark, on his composite amendment which neatly brings all the issues that have been debated previously into one. During those debates, all the relevant arguments were made, and I speak today in favour of Amendment 1.

It is important that there be annual rate revaluation reporting. Business rates reviews cannot be left to drift from year to year, especially as so many businesses are struggling. Keeping a careful watch on how revaluations are affecting businesses is vital to ensuring a healthy economic recovery. Towns and high streets are being decimated by the lockdown, as the noble Lord, Lord Kennedy, said. Some three-quarters of retail outlets are closed and many have been boarded up. Only essential outlets are open: supermarkets, pharmacies, opticians and some DIY stores. As lockdown is gradually released, many shops will, hopefully, reopen, but the effect of business rates may be the last straw. This must be monitored to prevent the total decimation of the high street shopping experience.

The Association of Convenience Stores has welcomed the Bill and the revaluation date being moved to 1 April 2023. It sees this as a positive step forward but it has several recommendations that would further assist its operation, including a reduction in the burden of business rates by resetting the business rate multipliers to more sustainable levels.

The whole issue of NDR is a balancing act between the need of funding local authorities and the economic viability of businesses. Local authority finances are stretched to the limit. Government grants have been radically reduced over the years and many councils now only deliver statutory services and these to the minimum standards permitted. It is not that councils do not wish to provide those vital services which communities rely on, such as grants, improved play areas, adequate and dignified social care, after-school clubs et cetera; it is the sad, realistic fact that they no longer have the finance to do this.

Non-Domestic Rating (Lists) (No. 2) Bill

Lord Thurlow Excerpts

3rd reading
Tuesday 9th March 2021 Lords Chamber

[Baroness Pinnock (LD) [V]]

My Lords, I give my thanks also to the Minister and his officials for the time that was offered for helpful briefings at each stage of the Bill. As the noble Lord, Lord Kennedy, said, it is a very simple Bill just to change the date of revaluations, which start in April this year but come into effect in 2023.

One issue raised during the Bill which we need to keep a watchful brief on is that, because the revaluation is starting this April, with the huge upheaval in market rents due to the pandemic it will be difficult to make assessments of rental value, which could affect the outcome of when businesses start paying in 2023. I hope the Minister can confirm that he will inform the House of any difficulties that arise from the timings of the revaluation.

The other issue discussed during the passage of the Bill, on which there was broad agreement on all sides of the House, was the strategic one about the future of the business rates system. Evidence was provided during all stages of the Bill demonstrating that retailers on the high street were at a huge disadvantage in business rates charged compared to those retailers which were online only. The differential is very large; a small shop in a small town may have a rental value at least five times that of a large online retailer in an out-of-town warehouse.

There is wide concern about the future of our high streets. The vast majority of people want to see the high street retained as a community focus, as the noble Lord, Lord Kennedy, has just described. One policy lever available to the Government to provide stimulus to the high street is a fundamental reform of the business rates system. It cannot for ever be put on the “too difficult” pile that the Government must have. Can the Minister provide the House with any timetable for the long-awaited reform of business rates? That would provide some hope to retailers on our high streets that change will come.

With those questions and comments, I look forward very much to hearing what the Minister has to say.

[Lord Thurlow (CB) [V]]

My Lords, it is a privilege to be asked to make the concluding remarks from the Cross Benches as we complete the passage of this Bill. I congratulate the Minister on steering it through, notwithstanding unsuccessful attempts—certainly from me—to divert the debate down other routes and related avenues. However, it is fair to say that we have been debating this in something of a straitjacket; those of us interested in non-domestic rates had nowhere to turn, try as we might—indeed, try as we did—to draw the failings of the NDR system to the Minister’s attention. He was perfectly within his rights to wear his benign smile throughout—and a tremendous smile it is. Why a straitjacket? Because it is a two-clause Bill, strictly focused on timing alone, to which there were only two amendments; I am aware of the frustrations of at least one other Peer who wished to table one and was unable to do so within the scope of the straitjacket. I congratulate the noble Lords, Lord Kennedy and Lord Moynihan, on successfully navigating these restrictions and tabling their well-founded amendments, both of which I was happy to support.

There are important implications in changing the dates for compiling the lists to two years’ time; I do not disagree with the principle, but I am concerned that the valuation date for determining rateable value, as we have just heard from the noble Baroness, Lady Pinnock, is within weeks. Without rehearsing the valuable and revealing contributions at earlier stages, it would be unwise to ignore the fact that retail and office markets are in crisis. Retail values are in freefall and office values are in pandemic-related confusion as businesses reassess their space occupancy needs. How on earth can the Valuation Office Agency determine rental value in these conditions? I wish it well.

There will inevitably be dramatic reductions in rateable values and a corresponding fall in local authority revenues. Unless the rate poundage is increased, when rates paid could exceed rent, that would be a lightning rod to disaster and a knife to the heart of the small business retail sector in that retail economy. Will the Chancellor continue to support the sector, or could we expect those who do not pay enough to compensate for those who pay too much? I am afraid that, regrettably, the Amazons of this world that do not pay enough will not make up the shortfall.

To conclude, I say to the Minister that I see some light in this dark place I describe. At every stage of the debate in this House, we have had reference to the fundamental review already mentioned. This is the real opportunity to introduce fairness across the landscape of NDR—sadly delayed but vital and urgent. I very much look forward to its publication and the chance for us all to consider it in the shape of a new Bill, no doubt steered by the Minister and his generous smile. I hope, for the sake of the smaller business sector, that it does not arrive too late.

[Lord Greenhalgh (Con)]

My Lords, this has indeed been a very narrow Bill but a very broad discussion. I thank noble Lords for the many points that have been raised during its passage, particularly in considering how we can support our town centres, especially our high streets, that give such a high quality of life to the residents of our towns and cities.

I point out to the noble Baroness, Lady Pinnock, that we are very clear that we will ensure that we keep a close eye on the impact of timings as this exercise is carried out and that we intend to look at the future of business rates. However, that is predicated on the fundamental review of business rates taking place later this year. I also assure the noble Lord, Lord Thurlow, that, as far as is practical, local authorities’ finance will be protected via the business rates retention scheme and other measures to ensure that there should be no material impact on local authority finances.

A number of issues have been raised, and it has been an important Bill.